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Energy Prices

Dáil Éireann Debate, Tuesday - 14 December 2021

Tuesday, 14 December 2021

Questions (27)

Darren O'Rourke


27. Deputy Darren O'Rourke asked the Minister for the Environment, Climate and Communications the actions he will take to reduce energy bills for households this winter; and if he will make a statement on the matter. [61986/21]

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Oral answers (6 contributions) (Question to Environment)

I wish to ask the Minister the actions he will take to reduce energy bills for households this winter and if he will make a statement on the matter.

I am here on behalf the Minister, Deputy Eamon Ryan, who has a cold and cannot be here and sends his apologies. The Government is acutely aware of the impact the recent increases in energy prices are having on households. This is a global phenomenon and expert commentators, including the International Energy Agency, IEA, have attributed this to a range of demand and supply factors that have contributed to a tightening of the European gas market supplies and the upward trend in wholesale gas prices we have witnessed since mid-2020.

The best long-term approach for Ireland to insulate consumers from volatility on international wholesale energy markets is to invest in energy efficiency, renewable energy and to expand interconnection with our European and neighbouring markets and to deepen internal electricity market integration.

The Government's immediate response to address the increase in domestic energy prices has been to utilise the tax and social welfare system to counter rising costs of living. Budget 2022 increased the weekly rate of the fuel allowance so that €914 will be paid to eligible households over the course of this winter. It increased the qualified child payment and the living alone allowance and an increase to the income threshold for the working family payment was also announced.

Consumers should continue to switch or engage with their energy supplier, and many households could still save on their bills if they did so. As recently as 9 December, switching supplier could save a customer consuming the average amount of electricity up to €313.

The Commission for the Regulation of Utilities, CRU, has in place a suite of protections against disconnection that are set out in the supplier handbook. In brief, priority customers cannot be disconnected, while vulnerable customers are protected over winter months from 1 November to 31 March each year while a CRU moratorium on disconnections for all customers comes into effect over the Christmas period. Additionally, under the supplier-led voluntary energy engage code, suppliers will not disconnect a customer who is engaging with them at any time.

Further, due to the ongoing pressure on households, the Government agreed today to provide a one-off credit of €100 to every domestic electricity account holder through their electricity supplier in the first quarter of 2022.

It is quite incredible a week out from Christmas that we are here with nothing more than an outline of a plan to do something on runaway electricity bills and nothing on home heating oil or fuel. Everyone could see the trend. As far back as 3 February Sinn Féin brought a Private Members' motion on the issue. The Government said its hands were tied. Wholesale gas prices increased by 400% and electricity by 200%. The Government said its hands were tied. Over the course of this Dáil term, every time we met in this forum on Priority Questions, I raised this issue and the Government said its hands were tied, pointing to international markets. It is two full months since the European Commission published its toolbox and said the Government's hands were not tied.

When is the measure agreed at Cabinet today to come into effect? Is it the case that the legislation will be in for January? Will the credit be applied to bills in March or April? Is there a way this can be done sooner? The Opposition will work with the Government to make this happen sooner. In our opinion it needs to happen before Christmas.

I welcome the Deputy's offer to co-operate with the Government to bring this in as soon as possible. That absolutely makes sense. I also welcome Deputy McDonald's comments today that she welcomes this initiative and that it will bring some relief. In terms of when this can be done, we cannot legislate before January but we will bring this in as soon as possible. With the co-operation of the Opposition I think we can bring it in very quickly. The target is to get it done in the first quarter.

Of course, there are two parts to this. There is what happens in the short term during this winter and how we avoid this type of situation occurring in the long term. That is what the toolbox discusses. The toolbox asks us to target people in energy poverty. It asks us to make sure we are broadly helping those who need it most and also finding long-term solutions in terms of switching to renewable energy and energy efficiency. That is why there is nearly €200 million of retrofitting funds being targeted specifically at low-income houses over the course of the next 12 months.

To what degree has an assessment been made of alternative ways to introduce this legislation or regulation in the quickest way possible? What does quarter 1 of next year mean? Is it the case that we will be dealing with this legislation for the first three months of next year? When will people see this impact on their bills? That is the real question people have. They want to see it before Christmas. This has been on the agenda for months at this stage and the Government has failed to act on it. The toolbox from the European Commission has been there for two months at this stage telling the Government it can act.

In addition, as the Minister of State has said, this needs to be part of a broader suite of measures. The Society of St. Vincent de Paul has indicated that targeted measures including the provision of a discretionary fund for utility debt should be considered and implemented. Is that something the Government will look at?

As for the options that are considered for dealing with energy poverty, a lot of work went into this before the budget. These were the discussions and calculations that took place to try to find who in the population needs the payment most, the best way to target it and the most efficient way to get that money out there. There was a range of things that went beyond the traditional measures such as increasing the fuel allowance by a number of euro. There was also an attempt to target people through the living alone allowance. Older people who are living alone have much more difficulty heating their homes than those who have a number of people in their household. That type of targeting exercise and options had been considered right up to the budget.

On the toolbox, it is recommended. It is not mandatory. It provides a suite of options to reduce suffering and people living in energy poverty during the winter. We have taken the best of what we could do and brought it in as quickly as possible. With the co-operation of the Opposition, I think we can get it into people's homes within the first three months of next year.